Handy Hardware dealers return to business in San Antonio

San Antonio -- Handy Hardware Wholesale has returned to normalcy -- or pretty close -- after a post-bankruptcy transition from a hardware co-operative to a for-profit wholesale distributor.

The Houston-based company's first show under the ownership of Greenwich, Conn.-based private investment firm Littlejohn & Co. -- and the first under the watch of interim CEO Doug Miller -- took place here Aug. 15-17. The show still had a lot in common with previous markets, including attractive giveaways (13 Honda ATVs) and a Saturday morning "breakfast specials" sale event that attracted some 500 dealers.

Foot traffic was expected to be off compared with previous years -- a result of the bankruptcy fallout. The company says it lost about 10% of its dealer base from the conversion from co-op to distributor. But according to Miller, the former chief of Jensen Distribution Services of Spokane, Wash., the remaining dealers are "very loyal."

Miller used the phrase "back to basics" to describe Handy's new direction. He said the highest priority is to increase the lines-ordered-to-lines-shipped service-level fill rates to 95% or higher. It's been running in the high 80s and, more recently, in the low 90s, he said.

"You're not going to see a lot of big changes at Handy Hardware," he said. "What you're going to see is better performance."

Pricing is one of the major competitive issues with the big boxes, and Handy is addressing it. In general, most hardware stores and home centers are too high-priced in popular items, Miller believes, and too low-priced at blind items. And if the hardware store beats the big box on the price of a half-inch galvanized elbow, it's probably not getting the credit for it. It's more important to be competitive on high-profile items.

In that regard, Miller is overseeing the introduction of a new retail pricing system: Distribution America Retail Pricing System (DARPS). "We used it for years at Jensen," Miller said. "And it works."

The company is also boosting its emphasis on a proactive sales force, and investing in training. Handy has hired industry veteran Bill Axline (check spelling), a Stanley veteran, as a consultant.

Handy dealer loyalty was one of the reasons Littlejohn was able to convince Miller to come out of retirement and help right the ship at Handy, he said. The other two major reasons, were the level of vendor support, and the willingness of the new owners to "provide all the support necessary" to grow the business.

The son of a hardware store owner, Miller was the first non-family member to run Jensen, which like Handy, is a member of Distribution America. "The distribution business is really pretty simple," he said. "We buy in big quantities, and we ship it out in smaller quantities when you want it. We don't want to make it difficult for dealers."